In October, Italy, one of the last holdouts to the European Unitary Patent, joined the party, leaving Spain and Croatia as the only members of the 28-member European Union (EU) opting out. As the fourth largest market in Europe in terms of population, gross domestic product (GDP) and patent validation, Italy’s reversal is a huge step forward. According to Benoît Battistelli, president of the European Patent Office (EPO), “Italy’s accession will … render the Unitary Patent more attractive to companies from other European countries and from across the globe.”
However, there are still many more hurdles to cross before companies or individuals can expect to use the unitary patent to protect their intellectual property throughout the EU, although Battistelli is confident it can be completed by the end of 2016.
So what is it exactly, and what hurdles is it still facing?
Under the new system, one patent will be in effect across all of the participating EU member states, including at least Germany, the United Kingdom, France and 10 others, without having to further validate the patent in each of the individual countries. Infringement, invalidity determinations and injunctions on the unitary patents will be enforceable across the participating states as well. The unitary patent will not only reduce the complexity of protecting IP in Europe, but will significantly reduce the strain on IP budgets, as it currently costs around 36,000.00 EUR (approximately $48,000 USD) today to acquire patent protection in all 27 EU member states.
These high costs usually mean companies generally only seek protection in a handful of countries such as Germany, France, the UK and Italy instead of all of them, which then leave their products unprotected in the majority of EU countries.
Under the proposed UP system, the individual or company will be able to request:
- A unitary patent
- A unitary patent along with patent protection for any European country not covered by the UP agreement. This would cover all EU countries participating in the new system, as well as those continuing to opt out and those not part of the EU, such as Spain and Switzerland; or
- A traditional European patent (filed through the EPO and validated in each country in which protection is sought).
Let’s consider a few issues that may further delay the system—or at least keep the benefits from being as widespread as proponents, including the EPO’s Battistelli, have hoped:
- More Hold Outs: Spain and Croatia continue to fight the system for various reasons, although Italy’s move could potentially entice them to reverse their decision as well. Spain continues to lose court battles against the UP, where it claims, in part, that the new regime’s translation requirements (application must be in English, French or German) are discriminatory against individuals whose language is not English, French or German, and that the requirements will harm internal markets and the economy. While an earlier “enhanced cooperation” agreement permits a majority of EU states to proceed with the UP without all of them agreeing to it, it has delayed the process. And not having Spain (and Croatia, to a lesser extent) participate in the UP regime means those wishing to protect their IP in those countries will have to follow the traditional EPO and validation process on top of the UP. In any case, not having Spain participate in the European Unitary Patent system will likely mean that fewer U.S. and Asian companies will choose to file patents in the country due to the larger coverage if the European Unitary Patent.
- Slow Ratification Process: Unitary patent protection will only apply in those states that sign and ratify the Unified Patent Court Agreement as well as adopt the UP regulations. Ratification of the agreement would give legal recognition to the new Unified Patent Court (UPC) as a judicial forum for settling disputes concerning the validity and alleged infringement of new unitary patents. The three largest EU countries in terms of number of European patents, currently Germany, the UK and France, must all ratify the agreement for it to have effect. So far, only France, along with seven other member states, have ratified it: Austria, Belgium, Sweden, Denmark, Malta, Luxembourg and Portugal. From the latest information available, Germany might ratify in early 2017 and the UK plans to ratify it prior to an upcoming referendum, which is most likely late 2017.
- Possible Brexit: Speaking of the UK, much of the discussion lately around the European UP is the possibility of the UK leaving the European Union, referred to as the Brexit. If this happens, it will no longer be one of the “compulsory ratification” states for the UP agreement to enter into force, leaving Germany, France and whichever other country is next in line after the UK, most likely Italy or the Netherlands. Withdrawal, however, will not occur immediately because the UK has to formally notify the European Council. EU treaties, such as the UP will cease to apply in the UK when a withdrawal agreement between the two parties enters into force, or two years after the UK notifies the European Council. While a Brexit won’t necessarily torpedo the agreement, it would delay and weaken it significantly because it will not cover one of the major European economies. However, a Brexit won’t affect the current European patent system governed by the European Patent Convention, so it will still be possible to obtain a UK patent by applying through the EPO and seeking UK validation.
What do you do in the meantime?
Until the Unitary Patent and the Unitary Patent Court are in effect, it’s business as usual for companies or individuals wanting to protect their IP in one, several or all EU member states. File the patent application through the EPO and then prioritize the jurisdictions in which you want protection. You must then file “validations” in each of these countries, and do so within three months from EPO publication of the grant. During these three months, the national validations must be accompanied—in all but a handful of countries—by translated patent claims or full patent specifications in an official language of the respective country. This time-consuming and complex task may require collaborating with as many as 40 different European agents, depending on the number of countries in which you are seeking validation.
This EPO-related complexity makes it increasingly clear how the European Unitary Patent can help organizations seeking protection in numerous European countries. The new system will give these companies much to consider as they either begin, or continue, to do business throughout the continent. While the Unitary Patent won’t be finalized for some time, knowing your options now—and deciding how you best want to proceed across Europe, will give you a leg up over the competition when it is finalized.